Beginning the Audit Report Essay

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Beginning the Audit Report
Kimberly Cummings
ACC/546
January 19, 2015
Jacob Mathews
Beginning the Audit Report

MEMORANDUM
January 19, 2015
To: Senior Partner
From: Kim Cummings
Re: Apollo Shoes Audit
Dear Senior Partner: As you know, our firm has been selected to perform the Apollo Shoes audit. The planning process has been the most delicate stage as we want to ensure we have a solid audit approach. The team I select will be dedicated in meeting the objectives and strategies for completing the audit. I will briefly explain to you how I plan to begin the audit process. Now that Apollo Shoes has selected our firm, the initial planning process has begun. Our team must make every effort to understand Apollo Shoes’ business and …show more content…
“The analytical procedures used in planning the audit generally use data aggregated at a high level (www.pcoabus.org).” Procedures may consist of reviewing changes in account balances from the prior year to the current year using an unadjusted working trial balance or general ledger balance. Procedures may involve an extensive analysis of a company’s quarterly financial statements. The analytical process used in the overall preview phase of the audit “will assist the auditor in assessing conclusions reached and in the evaluation of the overall financial statement presentation (www.pcoabus.org).” A wide variety of analytical procedures may be used for this purpose. The procedures our team will use consist of reading financial statement and notes, consider adequacy of the evidence gathered, and consider unusual or unexpected balances.
Materiality and Risk in Audit Design Materiality is essential when considering the appropriate type of report for a given set of circumstances. Audit risk is the risk the auditor may unintentionally “fail to appropriately modify his or her opinion on financial statements that are materially misstated (www.pwc.org).” Materiality is considered by auditors when planning and evaluating the results of an audit. Audit risk and materiality affect the applications of generally accepted auditing standards, particularly the measures of field work and reporting. “Audit risk and materiality need to
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